I feel terrible about the devastation in Japan. Nonetheless, my job here is to take advantage of my background as an electrical engineer and nuclear physicist to make money for my subscribers. Action Systems,Inc., a company I founded had over half the nuclear power plants in the USA as its clients.
Opportunities abound both on the long side and the short side. The best time to short sell was on Friday, March 11,2011. Subscribers to the ZYX SHORT SELL CHANGE ALERT received the following alert on Friday:
MAKING MONEY FROM THE EARTHQUAKE IN JAPAN
We feel terrible about the tragedy in Japan. Our job is not to express how we feel, but to find gems for you to make money.
CAMECO CORPORATION (CCJ)
There are 11 nuclear reactors near the epicenter of the earthquake. Nuclear reactors are designed to automatically shut down when vibration over a certain amount is detected. At this point, it is not clear if all these reactors shut down as designed and if there is any damage.
If there are any radiation leaks, nuclear power will again get a bad name just like it did in the aftermath of Three Mile Island accident in the US and in Chernobyl in Russia. Nuclear plants use uranium as fuel. The largest uranium miner is Cameco, a Canadian company that trades on the New York Stock Exchange. Cameco has lately been a high flying stock. If there are any radiation leaks, it will get hit.
The best way to make a decision to short Cameco is to wait for the news and short it only if it is confirmed there is at least one radiation leak.
The problem with the above approach is that the news may become available over the weekend when the markets are not open and the stock may gap down on Monday. Those willing to take the risk may consider short selling Cameco this afternoon. If there are no leaks reported then cover it Monday, more than likely at break even or at a slight loss. On the other hand if any leaks are reported, the investor may realize gain in excess of 20% in a very short time.
Sell Zone: $37.40-$37.95
Target Zone: $24.00-$31.00
Stop Zone: $38.40-$39.10
TAYLOR DEVICES (TAYD)
Taylor Devices makes seismic dampers to ameliorate the effects of earthquakes on structures. The stock has a history of running up after earthquakes and then slowly coming down over a period of a few months. Be careful in short selling this stock as the float is small (number of tradable shares) and short interest tends to spike.
Sell Zone: $8.90-$10.00
Target Zone: $5.00-$5.50
Stop Zone: $12.11-$15.11
US TREASURY BONDS (TBT)
Lately Japanese have been the biggest buyers of US treasury bonds. It is likely that Japanese will repatriate money for reconstruction back home. The treasury bonds may get hit because of lack of buying by Japanese. One way to trade treasury bonds without trading futures is to buy an inverse ETF. Our choice is TBT because of its liquidity.
Buy Zone: $34.00-$37.00
Target Zone: $40.00-$44.00
Stop Zone: $26.00-$29.00
INVESTMENT OPPORTUNITIES ON THE LONG SIDE
There are three areas where once in a life time opportunities on the long side will arise in the coming day.
- Nuclear utilities
- Nuclear plant construction companies
- Natural gas production stocks
The research at The Arora Report is projecting $25 to 50 billions of damage. There will be lots of opportunities from reconstruction. We will provide details of the trades when they meet all six screens of the ZYX Change Method.
The table below shows damages from previous accidents.
The chart shows the present an projected usage of different fuels for electricity generation.
As the use of nuclear power declines natural gas is the cheapest substitute and our favorite natural gas stock is… more details on a number of opportunities in all three areas are available to the subscribers of ZYX BUY CHANGE ALERT. Subscribers receive precise entry points, stop points and target points. As the news flow changes, subscribers are alerted to any change on all open recommendations.
